The IRS released its inflation adjustments for tax year 2027 on November 5, 2026, and the numbers matter more than usual this year.
Inflation has cooled from the blistering pace of 2022, but prices for housing, groceries, and gasoline remain painfully high. The IRS adjustments—which apply to tax returns filed in early 2028—are designed to prevent “bracket creep,” where rising wages push taxpayers into higher rates without any real increase in purchasing power.
The headline numbers: **the standard deduction rises to $33,200 for married couples filing jointly** (up $1,000 from 2026) and **$16,600 for single filers** (up $500). The **maximum child tax credit climbs to $2,300 per child** (up $100), with up to $1,800 refundable .
But the details matter more than the headlines. Here is what actually changes, and how to use it.
The 2027 Tax Brackets: Where You Land
The seven federal tax rates remain unchanged: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. What changes is the income threshold at which each rate kicks in. The brackets were adjusted upward by approximately 3.2% to account for inflation .
For single filers:
| Rate | Income Threshold |
|---|---|
| 10% | Up to $12,800 |
| 12% | Over $12,800 |
| 22% | Over $52,025 |
| 24% | Over $109,125 |
| 32% | Over $208,325 |
| 35% | Over $264,550 |
| 37% | Over $661,375 |
For married couples filing jointly:
| Rate | Income Threshold |
|---|---|
| 10% | Up to $25,600 |
| 12% | Over $25,600 |
| 22% | Over $104,050 |
| 24% | Over $218,250 |
| 32% | Over $416,650 |
| 35% | Over $529,100 |
| 37% | Over $793,650 |
Source: IRS Revenue Procedure 2026-35
The critical point that trips up many taxpayers: you do not pay a single rate on all your income. If you are single and earn $60,000 in 2027, you pay 10% on the first $12,800, 12% on the next $39,225, and 22% only on the portion above $52,025. Your effective tax rate will be well below your top marginal rate.
The Standard Deduction: A Bigger Buffer
The standard deduction is the amount of income you can exclude from taxation before the brackets even apply. For 2027:
-
Married filing jointly: $33,200 (up $1,000)
-
Single: $16,600 (up $500)
-
Head of household: $24,925 (up $775)
-
Married filing separately: $16,600 (up $500)
For most taxpayers, the standard deduction is larger than what they would get by itemizing. If you are single and earn $60,000, your taxable income drops to **$43,400** after the standard deduction. That puts you squarely in the 12% bracket, not the 22% bracket you might have assumed.
There is one caveat for older taxpayers. The temporary senior deduction of $6,000 for those 65 and older remains in place through 2028, but it is separate from the standard deduction and phases out at higher income levels .
The Child Tax Credit: $2,300 Per Child
The maximum child tax credit rises to **$2,300 per qualifying child** for 2027, up from $2,200. The refundable portion—the amount you can receive even if you owe no tax—increases to $1,800 .
This is not a dramatic change, but it matters for families. A married couple with two children and $100,000 in income would see their tax bill reduced by up to $4,600, assuming they qualify for the full credit.
What Else Changed
Several other provisions were adjusted upward, and some are worth knowing:
Estate tax exclusion: The amount you can pass on at death without federal estate tax rises to **$15,480,000** for 2027, up from $15,000,000 .
Annual gift exclusion: You can give up to **$20,000 per person** in 2027 without triggering gift tax reporting, up from $19,000 .
Foreign earned income exclusion: For Americans working abroad, the exclusion rises to **$137,300**, up from $132,900 .
Alternative Minimum Tax (AMT): The exemption rises to $93,000 for single filers and $144,700 for married couples filing jointly .
Earned Income Tax Credit (EITC): The maximum credit for taxpayers with three or more children rises to $8,496 .
SALT deduction cap: The state and local tax deduction limit rises to **$40,804** for 2027, with the full deduction phasing out above $510,050 in income . This is a 1% annual increase written into the 2025 tax law, not an inflation adjustment.
What This Means for Your Paycheck
The practical impact depends on your income and filing status. Here are two examples:
**Single filer earning $75,000:** After the $16,600 standard deduction, taxable income is $58,400. That falls into the 22% bracket, but only the portion above $52,025 is taxed at that rate. The effective tax rate is roughly 13.5%.
**Married couple earning $120,000:** After the $33,200 standard deduction, taxable income is $86,800. They stay in the 12% bracket entirely, paying an effective rate of about 9.7%.
These are rough calculations and do not account for credits, pre-tax deductions, or state taxes. But they illustrate the core point: the standard deduction and bracket adjustments work together to keep more of your income in lower tax tiers.
What to Watch Next
The IRS has not yet released the 2027 contribution limits for 401(k)s and IRAs. Those typically come later in the year and will matter for retirement planning. The Social Security Administration has already announced a 3.6% cost-of-living adjustment for 2027 benefits, up from 2.8% this year .
For now, the 2027 tax numbers give you a framework for planning. If you are expecting a raise or a bonus next year, check which bracket the additional income will land in. If you are self-employed or itemize deductions, the SALT cap increase may affect your calculations. And if you have children, the higher credit is a modest but real benefit.
FAQ
Q1: When do the 2027 tax brackets take effect?
The 2027 brackets apply to income earned from January 1 through December 31, 2027. You will use them when filing your tax return in early 2028. Your 2026 return, filed in spring 2027, still uses 2026 brackets .
Q2: What is the standard deduction for 2027?
$33,200 for married couples filing jointly, $16,600 for single filers and married individuals filing separately, and $24,925 for heads of household .
Q3: How much is the child tax credit in 2027?
The maximum credit is $2,300 per qualifying child, with up to $1,800 refundable .
Q4: Do the tax rates themselves change?
No. The seven rates (10% through 37%) remain the same. Only the income thresholds for each bracket are adjusted upward for inflation .
Q5: What is the top tax rate and threshold for 2027?
The 37% rate applies to single filers with taxable income above $661,375 and married couples filing jointly above $793,650 .
